The industrial gases business continues to defy the odds, robust and resilient in the face of a generally stale economic climate. Global manufacturing growth is still slow, with economic headwinds persisting throughout 2012.
Weaker volumes for the gases industry are offset by ongoing efforts in cost reduction, increased productivity and maximised efficiencies. This is something the industry is well versed in and has clearly identified and executed well.
Moreover, the gas industry’s inherent position at the heart of so many applications and end-uses ensures there is still demand for its products, even during the most difficult of external climates.
Much aspiration and investment is held in the so-called developing economies, with the gas and equipment companies fast positioning themselves for future growth in these regions. For mature markets like North America and Western Europe, however, it is a more puzzling picture.
There is still growth in these regions from a gases perspective, although generally minimal, but economically speaking it appears to be a much gloomier outlook. A continually slow road back from the global economic crisis weighs heavily on manufacturing activity on both continents, and does little to reassure that more vigourous growth will return anytime soon.
So, what lies behind the next wave of growth in these mature markets? What else is the gases industry traditionally good at?
The answer to both of these questions could just be innovation.
When I caught up with Air Liquide’s Olivier Delabroy recently in Paris, the Group’s Vice-President of R&D, he described his optimism both for Europe and its future, and for the gases industry as a whole.
Delabroy spoke of the ‘unique vantage point’ that the industry has at the heart of so many industrial sectors and value chains, and the importance of innovation and R&D.
As we discussed societal megatrends, emerging economies and capturing opportunities, I asked, can innovation be the stimulus for the mature markets like Western Europe and North America?
“Absolutely, let’s not forget the mature countries. Mature economies such as Europe have no choice but to innovate and to establish their own sustainable competitiveness. Some countries have put together strong stimuli research programmes to drive such innovation. My job is to analyse those opportunities country by country, mature market by mature market. Capturing the strengths of each country is the best way to leverage my extensive R&D footprint in mature countries (US, Japan and Europe) ”
Delabroy paints a powerful picture of the task ahead. The message is clear, the opportunities for growth do exist – and industry needs to leverage these opportunities as and when they appear.
This is especially apparent in North America, as gasworld explores the changing dynamics of the region’s gases business here in Miami, Florida this week.
Shale gas, homecare and clean technologies are among some of the vibrant new opportunities that North America presents for the industrial gas and equipment companies.
[Comment from Miami Speaker to go here]
For Delabroy, there appears to be little doubt that innovation can – and will – be the stimulus for future growth in mature markets.
“Innovation will happen,”he said, “we cannot do everything everywhere, so what we have to do is capture any opportunities that we can leverage. In Japan and Germany for instance, due to their political stance regarding nuclear power, it is to be expected that they will be strong on energy and alternative energies – and that is a key fact we need to capture.”
The rise of clean technologies is well documented, as the so-called ‘fuels of the future’ these hold much promise both for the consumer and industry alike. The same could be said of markets like homecare, though for very different reasons. What these opportunities mean for the gas industries of Europe and the Americas is whatever the industry chooses to make of them.
Likewise, prospects also exist in traditional applications of industrial gas technology, from steel-making to glass production, and the challenge is to breathe new life into these applications with processes and expertise in areas such as oxy-combustion and oxyfuel technologies.
Each country, each application, and each opportunity will need to be researched and analysed on its own merits and revived as a growth driver by new solutions. For the markets of North America and Western Europe, it seems that much of their future potential may well lie in applications of the past. Innovation can realise that potential.
“I think innovation is the only way out with of course being a strongly optimistic person! Of course it is difficult, it is complex, but research ecosystems will be analysed and leveraged, new industrial sectors will emerge and we will make it happen. I am confident.”